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- Title
Meat-Packer Conduct in Fed Cattle Pricing: Multiple-Market Oligopsony Power.
- Authors
Koontz, Stephen R.; Garcia, Philip
- Abstract
The exercise of market power across multiple geographic fed cattle markets is measured with an econometric model which links behavior of the margin between boxed beef and regional fed cattle prices to an oligopsony model of multiple-market conduct. The game theoretic economic model suggests that for market power to be exercised in a single market a discontinuous pricing strategy must be followed. Total market power is enhanced if meat-packers coordinate this pricing strategy across geographic markets. Tests reject independence of pricing conduct across geographic markets which suggests multiple-market market power is present. The extent of the market power also is consistent with the economic model. More market power is exercised across regions with the same meat-packing firms. However, the magnitude of the market power is small and decreased between the early and late 1980s.
- Subjects
CATTLE industry; ECONOMIC competition; MEAT packing; PRICING; PRICE regulation; ECONOMIC models
- Publication
Journal of Agricultural & Resource Economics, 1997, Vol 22, Issue 1, p87
- ISSN
1068-5502
- Publication type
Article